Business Benefits to Leasing a Vehicle
by Startacus Admin
Business car leasing is becoming an increasingly popular way for companies to provide vehicle solutions for their employees or themselves. You will find that more and more 
people choose to look online for personal leasing options if a company car isn’t available to them rather than make a personal purchase for lots of reasons. It is cost-effective, allows you to switch up your vehicle more regularly as well as a whole range of other benefits.
If you are looking at leasing as a business option, have a look at some of the advantages below.
There are Tax Benefits Available
If you lease a car via a VAT registered company – you are able to claim 50% VAT on the monthly payments back. If your chosen vehicle is a van, you can then claim the full amount back. The only exception to this is if you are using the vehicle for personal reasons, if it’s privately used – then nothing can be claimed back in terms of VAT.
The cost of the monthly lease however, can be claimed against the profits – although the percentage can vary. If your car emits less than 160g/km – 100% can be claimed back, if it emits more than that only 85% can be claimed. It’s always worth checking in on that before agreeing to any lease.
Your Money isn’t Tied up in a Depreciating Asset
We all know that cars lose their value as soon as they are driven out of the showroom. The only issue with that is, you have already invested a lot of cash in the car. If you 
choose to lease a car rather than buy – this means that your money isn’t tied up in something that’s depreciating in value and can be used in investments.
It’s a Good Accounting Solution
If you are using business contract hire – this means that the financial liability of this doesn’t need to show up on your balance sheet.
Do I Have to Pay Company Car Tax?
You may have to pay company car tax depending on your situation. If you use the car for personal use (even if this is driving to and from work) – then you will be eligible to pay tax. If you decide to leave your car at your workplace overnight, or if it’s not used at all personally, then you don’t need to pay tax.
If you fit the below criteria – you will also be exempt from company car tax:
- You are a partner in the company, or in partnership
- If you are part of a limited liability partnership
- You are a sole trader
If you are looking for a car either as an employer or as an employee – then business car leasing is definitely a viable option. It could save you on tax, be a great accounting solution – and is a perfect excuse for you to change up your vehicle when you feel like it.
Subscribe to our newsletter
If you would like to receive our startup themed newsletter, full of the latest startup opportunities, events, news, stories, tips and advice, then sign up here.
Innovative project launched by UK Proptech startup to reduce workers' commuting and in turn help alleviate pollution and congestion
Startup funding is never easy, however here are a few of the options that can help you fund your startup without going broke in the process
Innovative startups are currently being sought by BMW Group Financial Services UK which has just launched the third instalment of its Innovation Lab
Starting a business can be a lot of hard work, so here's a few ways to avoid burnout and find a healthy work life balance.
The child health app on a mission to become the first nationwide digital redbook, just got a step closer to making their mission a reality...
The Cambridge-based startup that has created an empowering tool to drive the next wave of biological innovation
At one-day event Ideation NI Thon, students will get the chance to solve global and local sustainability, environmental, city and health problems.
NI startup ESTHER, a peer-2-peer giving platform allowing charitable donors to give money directly to people living in poverty, head to New York for a 4-day fact finding mission.
The lowdown on how an Australian startup generated global sales for their innovative product, "weighted blankets"...
At 82% the UK takes 4th place in the list of countries being most ready for automation and robotics, whilst 30% of UK population’s jobs are at risk of automation.
Published on: 16th April 2018
.png)
If you would like to enable commenting via your Startacus account, please enable Disqus functionality in your Account Settings.
- Ideation NI Thon at NI Science Festival sets out to solve global issues 17th Jan 2020 At one-day event Ideation NI Thon, students will get the chance to solve global and local sustainability, environmental, city and health problems.
- NI startup ESTHER takes flight to New York 16th Jan 2020 NI startup ESTHER, a peer-2-peer giving platform allowing charitable donors to give money directly to people living in poverty, head to New York for a 4-day fact finding mission.
- 2019 stats show that the gender pay gap continues 14th Jan 2020 Recent research by Starling bank shows that in 2019, women earned up to £12,319 less per year than their male colleagues of the same age and within the same industry
- Digital DNA Awards 2020 nominations now open 13th Jan 2020 The Digital DNA Awards, held in partnership with MCS Group, celebrate the best tech talent, from companies of all sizes, excelling in the world of Digital and Tech and not just in NI...
